In the coming days, volatility in the oil and gas markets may increase significantly, especially in light of expected economic data and potential statements from key policymakers. The focus should now be on support and resistance levels as the market is at a critical decision point.
Brent crude oil futures continue to consolidate within a tight range of $72–73.75 per barrel. Support at $70-70.7 remains key, preventing further declines, while the descending resistance level limits price action from the top. In these conditions, traders must navigate through a mix of conflicting factors.
A break below $70 could intensify bearish sentiment and lead to a test of $68 and lower. On the upside, the next target is $75, which would open the way to $78.
Fundamental drivers: positive factors and risks
Assessing the geopolitical situation remains a complex task. The likelihood of a ceasefire agreement in the Russia-Ukraine conflict appears to be delayed based on recent signals. This is a positive factor for the oil market, as continued tensions support a risk premium in prices.
Encouraging news has come from Asia: China's manufacturing PMI for February came in well above expectations. This reinforces hopes for stable demand from the world's largest energy importer.
However, the global economic outlook remains threatened by the possible resumption of trade wars initiated by Donald Trump. Such a scenario could slow global GDP growth, putting pressure on oil demand.
Sanctions against Iran and Russia have not yet had a significant impact on supply volumes to Asia. However, potential increases in restrictions on either country's shadow fleet could intensify competition for available vessels, which could impact supply logistics.
Gas: growth in question
Natural gas futures are in a bull market, but the current move is accompanied by a correction, the depth of which is difficult to gauge. Key levels:
- Resistance: $3.887 – the zone of the descending trendline
- Support: $3.567 – a potential level where demand could pick up
A break above the resistance level could resume the bullish trend, while a drop below the support level would open the path to $3.45 and lower.
This week's top events
- March 4: US oil inventories data from API.
- March 5: EIA statistics, the start of China's National People's Congress.
- March 7: US labor market data, a speech by Federal Reserve Chair Jerome Powell, and Baker Hughes rig count.
